Rich, Good points.
Because Westell really has not provided good and reliable information before earnings or during the conference call, we simply don't know for sure what's going on. How it is that EFNT significantly beats estimates while WSTL misses by a mile is left a mystery. Your guess that EFNT may be the primary supplier at SBC with WSTL filling the secondary swing role may be on target.
The fundamental problem is that Marc Zionts hasn't been up front in providing reliable information to shareholders and analysts -- information that is critical to understanding the company and its prospects. The result has been a disconnect between management's version of reality and the shareholders' unfortunate discovery, a discrepancy between what has been promised and what has been delivered. It has betrayed shareholder trust, so there is no credibility and no basis for relying upon his statements about the company's future.
Whether or not they have exhibited gross incompetence and mismanagement, Westell's management has demonstrated some of the worst in corporate communications and shareholder relations. Instead of a shareholder friendly attitude of mutuality ("We're in this together"), they have adopted an attitude of secrecy and what can most charitably be described as poor communication, if not deception. They have put management at odds with shareholders. Why MZ has chosen this course also remains a mystery. I believe it has had a much more negative impact on the present and future share price than an earlier candid and forthright bad news announcement would have produced. But when management cannot be trusted, what do we really know except that we weren't let in on what was really happening until the nasty earnings surprise? Even now, what do we really know about what has actually gone on or why? Perhaps they have radically screwed up and felt that their butts needed to be given deep cover. Perhaps they felt they could somehow finesse the fiasco with a limited disclosure, "trust me" conference call. In any case, it's a sorry state of affairs when shareholders can no longer trust that any information they they are given isn't misinformation.
I sold my remaining shares this morning. I wish the best to all remaining shareholders. I have appreciated the time and effort so many have put in trying to evaluate this company and its prospects, as well as their willingness to share it. It is unfortunate that management's failure to provide good information has betrayed and undermined that endeavor. |
